Bitcoin's "Red Month": Why September Still Dominates the Crypto Cycle
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Bitcoin's "Red Month": Why September Still Dominates the Crypto Cycle
Objectively speaking, the pullback in most September cases was actually relatively mild.
Navigating Web3 tides with focused insightsSource: Cryptoslate
Translation: Blockchain Knight
The U.S. Department of Commerce has begun publishing official economic statistics directly onto public blockchains, calling the move a new initiative to enhance transparency and data security.
Bitcoin's "red month" is approaching—yet another September looms. Is a price decline inevitable? Let’s examine some historical reasons why Bitcoin has often underperformed during its ninth month of the year.
Since 2013, September has consistently been a challenging month for Bitcoin, with prices declining in eight out of the past eleven years. This may be because retail investors typically take profits after summer rallies or even sell crypto to cover autumn expenses such as tuition and tax planning.
Bitcoin's "red September" could also be a case of a self-fulfilling prophecy. As traders widely anticipate price declines, they adopt more conservative, defensive strategies, thereby pushing the market further downward. Objectively speaking, however, most September pullbacks have historically been relatively mild.
Notably, September often forms a local bottom, after which Bitcoin tends to rebound strongly into a "golden October." Historical data shows that the fourth quarter frequently sees market recovery, sometimes even substantial gains. For example, in October 2020, Bitcoin surged from around $10,800 at the start of the month to over $13,800 by month-end—an increase exceeding 27%.
By any measure, the market performance in August 2025 was dramatic. On August 14, Bitcoin hit a record high of $124,533, but just two weeks later plunged 11%, falling to lows near $110,000.
This downturn wiped out nearly $200 billion in market value. The immediate trigger was a large whale—one who had been dormant for a long period—selling approximately 24,000 BTC, driving spot prices below $109,000 and triggering the largest liquidation cascade of the year.
During this liquidation event, nearly $900 million in derivatives positions were forcibly closed, with 90% being long bullish positions. Among them, $150 million in Bitcoin positions and $320 million in Ethereum positions were liquidated. In comparison, Ethereum showed relative resilience: despite an 8% drop, it remained above the 100-day moving average.
Recent market weakness isn't solely due to technical factors or sentiment. Order books in both spot and derivatives markets have remained persistently thin, meaning any large-scale sell-off—such as the aforementioned whale activity—can amplify price volatility.
Meanwhile, end-of-August on-chain data indicated low market activity and reduced capital inflows, further weakening buying support.
Macroeconomic uncertainty continues to act as a headwind. As markets focus on the U.S. Federal Reserve's policy moves in September, traders are assessing volatility risks and hoping that favorable macro signals—such as rate cuts—could reignite optimism.
Cryptocurrency trader Cas Abbé has outlined three potential scenarios for Bitcoin as September approaches.
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"Range-bound consolidation and recovery" scenario (40% probability): Bitcoin is expected to trade sideways between $110,000 and $120,000 for most of September. During this phase, excess leverage would gradually unwind and institutional investors might steadily accumulate. Such consolidation could lay a healthier foundation for a potential Q4 rally.
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"Second leg down" scenario (35% probability): If Bitcoin falls below $110,000, it could trigger another wave of liquidations, pushing prices into the high $100,000 range and clearing remaining leveraged positions. Historically, such pullbacks often precede the formation of a strong bottom.
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"Rapid recovery" scenario (25% probability): If institutional buyers enter aggressively, Bitcoin could quickly reclaim the $117,000–$118,000 range, reigniting bullish sentiment early.
Abbé advises traders to closely monitor key on-chain and macro indicators throughout September, particularly options market activity ahead of the September 27 expiry, which could provide crucial insights into market positioning and sentiment.
Whether this year’s Bitcoin “red September” will turn “green” remains uncertain. But given the current thin liquidity, heightened volatility, and institutions waiting to enter, this September may hold both risks and opportunities.
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